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Bas_tet [7]
3 years ago
8

A company purchased a delivery van for $30,000 with a salvage value of $6,000 on January one, Year 1. It has an estimated useful

life of 6 years or 60,000 miles. The van was driven 13,000 miles in the first year. Using the units of production method, how much depreciation expense should the company recognize on December 31, Year 1
Business
1 answer:
insens350 [35]3 years ago
4 0

Answer:

The depreciation expense for Year 1 under units of production method is $5200.

Explanation:

The units of production method of depreciation charges the depreciation expense based on the activity level for which the asset was used during a period. There is an estimated useful life of the asset in terms of how many units it is expected to produce through out its useful life. The formula for units of production method of depreciation is,

Depreciation charge per unit = (Cost - Salvage value)  /  Total estimated useful  of asset in units

Thus, per unit depreciation is =  (30000 - 6000) / 60000    =  $0.4 per mile

In the first year, the asset is used for 13000 miles so depreciation expense for the year is,

Depreciation expense Year 1 = 0.4 * 13000  =  $5200

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(C) They treat income as 'passed through' to the investor for tax purposes.

<h3>What are mutual funds?</h3>
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4 0
1 year ago
Tucker's Trucking is considering a project with a discounted payback period just equal to the project's life. The projections in
attashe74 [19]

Answer:

Total units will be 8845 units

So option (E) will be the correct option

Explanation:

We have given fixed cost = $81000

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So option (E) will be the correct option

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2 years ago
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jek_recluse [69]
<span>When a firm doubles its inputs and finds that its output has more than doubled, this is known as economies of scale. When a business has reached economies of scale, that means there is an equal amount saved in costs by increasing the production amount. The more you produce the lower the cost is to produce those items and the more amounts of items you have to sell. 

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7 0
3 years ago
Assume there is a simultaneous decrease in the incomes of people in the market for new homes and a decrease in the wages paid to
ioda

Answer:

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Explanation:

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